Decrease of exports is temporary and Israel is still a center of innovation, says General manager of Intel Israel.

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Science-oriented industry is one of the pillars of the local economy. In
2011, exports from this industry amounted to more than 45 percent of
the total export of goods. These industries are also considered an
engine of growth.

Consequently, the future of the industry is of
prime importance to the local economy. The decrease in exports and the
difficulty in raising funds to finance the industry is raising concern .

But
is this a passing phase influenced by a combination of the current
global downturn and the business cycle or are there deeper reasons? To
find the answers to these questions, The Economic Post interviewed
Maxine Fassberg, general manager of Intel Israel and VP of Intel’s
Technology & Manufacturing Group.

“Currently, the hi-tech
industry is going through a period that cannot be described as easy,”
says Fassberg. “The origin of the problem stems from the fact that the
science-based industry is export oriented and dependent on overseas
finance. In my opinion, it is a temporary problem because the essentials
are excellent. Israel is still a center of innovation, and our
developers have fascinating ideas.

And that is what counts.

The
current problems are imported. Demand in our hi-tech markets has
declined because the EU, which accounts for one-third of our exports, is
in the midst of an economic crisis. The US is in better shape, but its
recovery from its own crisis is slow.

The Far East, which is
considered the world's early adopters, has its problems. China has a
strong GDP growth, but it is low compared to its performance in the
past.

The same holds true for raising money to finance the
hi-tech industries, and especially start-ups. The world is strapped for
money. It is not only local VC funds that are feeling the pinch; it is
also the VC funds in the US and Europe,” she says.

“But this, in
my opinion, is a passing phase and, consequently, I believe that we
should invest in this downturn,” she is quick to add. “A downturn is
followed by an upturn, By investing when the business cycle is at the
trough, one can reap the benefits when the cycle reaches its peak.”

Most executives of science-oriented companies complain that there is a shortage of personnel. Do you agree?

I
wouldn’t say there is a shortage of engineers, but there is a shortage
of technicians. This is an endemic problem for the local economy as a
whole. The education system produces doctors, engineers, biologists,
etc. But it does not produce carpenters, metal workers, plumbers,
printers, etc., nor does it produce the much-needed technicians for the
hi-tech industry – i.e., people who have two-year degrees in
electronics, robotics, mechanical engineering and so forth.

For
us -- a hi-tech company that does both development work and production
work -- this shortage of technicians is a big problem. Up to a couple of
years ago, technicians were trained in colleges. Then these
institutions decided to upgrade themselves by training engineers and
giving BSCs. So now we have a situation in which we have more engineers
than we need and much fewer technicians. I would like to add that
generally, engineers who graduate from college are not on a par with
engineers who graduate from university.

A production company like
ours, which is totally automated and operates production machinery that
costs tens of millions of dollars, requires skilled operators,
technicians. And at these times, they are not found so easily. When we
hire staff, we hire the best. This means that in most cases, we hire
engineers who are university graduates. How do you overcome this problem?

We
have come to an exclusive agreement with one of the colleges by which
they train -- about 40 to 50 technicians a year -- according to our
specifications. Intel is not the only organization that has such a
system. The Israel Aircraft Industry, Teva. Rafael and the armed forces
all have similar technicians training facilities.

The Education
Ministry is keen to reintroduce technical schools where the youngsters
can learn a trade. Such an education system can do wonders for what are
termed low-tech industries, which at these times are losing out to
low-salaried countries. These new highly trained young people can then
upgrade these industries by using hi-tech machinery, which can reduce
production costs, produce better-quality products and thereby compete
with inexpensive products from the Far East and Eastern Europe.

You have a very good record of hiring Arabs and haredim, who are generally not very well integrated in the workforce.

Yes,
I am very proud of our record in that particular area. And let me tell
you that we do not lower our recruitment standards for anyone. But we do
not discriminate! We believe that by recruiting from 100% of the
population, we get the best results.

And that includes minorities
of all kinds, including women. We recruit the best and give them our
best. Intel has an excellent record as an employer.

We have been
voted the best workplace in Israel year after year. We invest in our
workforce, and it pays off. We are an efficient operation because a
satisfied workforce gives good results.

Please tell me something about Intel operations in Israel.

We
started operations in Israel in 1975 with four employees doing research
work. Now, 37 years on, we have over 8.100 employees: 4,000 in Haifa
mostly doing research work; 1,500 in Jerusalem (doing R&D and
die-prep facility); and 3,100 in Kiryat Gat doing production work. We
are considered one of the best FABs (wafer production facilities) in
Israel. And since Intel is considered the best and most efficient
producer of wafers in the world, I believe that in our field we are
among the best, if not the best, in the world.

Intel has one of
the largest hi-tech operations in the country and has an important
bearing on the development of Israel as an important and innovative
global hi-tech center. Intel Israel is considered to be the largest
private employer in the country today, with employees in its development
and production facilities in Haifa, Jerusalem, Kiryat Gat, Petah Tikva
and Yakum. It began operating in Israel in 1974 with four employees.
Although 2012 was a challenging year in which Intel strove to achieve
its technological and business goals, the company increased its staff
with 1,400 employees, and 600 new positions are expected to open in
2012. intel employees come from all sectors of Israeli society,
including secular and Orthodox Jews, Arabs and Druse.

The company
contributes to the Israeli economy in many ways. In addition to
employing 8,100 people, it indirectly impacts the employment of 23,000
workers in Israel. In 2011 alone, Intel Israel exported goods worth $2.2
billion and made $628 million of reciprocal procurements from Israeli
suppliers. Over the past five years, Intel Israel contributed more than
$4.1 billion to the development of the local economy as part of its
Industrial Development Plan.

The company’s development centers
spearhead Intel’s product development worldwide and are focused on
Intel’s areas of growth: processors, platforms, software and services.
In 2011, Intel experienced the unprecedented success of the Sandy Bridge
processor. The processor, developed in Intel’s Haifa and Yakum
development centers, was the fastest-selling processor in Intel’s
history.

In 2012 Intel started to manufacture the Ivy Bridge processor, which was also developed partly in Haifa.

The upgrade was a vote of confidence in Intel
Israel’s contribution to the Intel Corporation and the State of Israel.
IDPJ, the international die prep facility in Jerusalem, doubled its
payroll in 2011 and introduced new technologies that support the entire
product line of the Intel Corporation.

Intel in Kiryat Gat began
operations in 1999, manufacturing processors using 0.18-micron
technology. In 2008, Intel opened its second Kiryat Gat plant, called
Fab 28.

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